Apple and Tesla stock split, new-look Dow help propel Wall Street to best August in more than 30 years

Stocks rose Monday morning as the S&P 500 wraps up its best August performance since the 1980s.

The S&P is up 7.2 percent this month to date, putting the index on track for its biggest August gain since 1984. The Dow Jones Industrial Average has rallied more than 8 percent this month and is also headed for its best August in 36 years.

This month’s gains have pushed the S&P 500 to record levels, officially confirming a new bull market has started. The Dow, meanwhile, erased its 2020 losses on Friday.

Two big stock splits take effect Monday. Apple shares gained Monday morning as a 4-for-1 split took effect. Tesla shares added nearly 3 percent, following its 5-for-1 split.

The Dow will kick off the week with three new constituents and with Apple having a much smaller influence on the 30-stock average.

Salesforce, Amgen and Honeywell will be included in the Dow, replacing longtime component Exxon Mobil, Pfizer and Raytheon Technologies.

Traders are also looking ahead to Friday, when the latest jobs report is set for release by the Bureau of Labor Statistics. Economists forecast that 1.255 million jobs were created in August.

Earlier this year, the Federal Reserve cut rates to zero and launched an open-ended asset-purchasing program to support the economy through the coronavirus pandemic. Last week, the central bank laid out an inflation policy framework that would keep rates lower for longer.

“Fed officials continue to drive up stock prices by committing to keeping interest rates close to zero for a very long time,” said Ed Yardeni, president and chief investment strategist at Yardeni Research, in a note. “Consequently, they are fueling the meltup in stock prices.”

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